STRATEGY AS A SIMPLE RULES
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Transcript of STRATEGY AS A SIMPLE RULES
STRATEGY AS A STRATEGY AS A SIMPLE RULESSIMPLE RULES
KELOMPOK 11 :APRESSYANTI, EKA KARTIKA,
MOURME TARUNA HALIM
Preface
Stable marketsmanagers rely on complicated
strategies built on detailed predictions of the future
Complicated, fast-moving markets (where significant growth and wealth
creation can occur) unpredictability reigns
Business becomes complicated strategy simple
Three Approaches to Strategy
Position Resources Simple rules
Strategic logic Strategic steps Establish position Leverage resources Pursue opportunities
Strategic step
Identify an attractive market Locate a defensable position Fortify and defend
Establish a vision Build resources Leverage across markets
J ump into the confusion Keep moving Seize opportunities Finish strong
Strategic question Where should we be? What should we be?
How should we proceed?
Source of advantage Unique, valuable position with tightly integrated activity system
Unique, valuable, inimitable resources
inimitable resources simple rules
Works best in Slowly changing, well-structured markets
Moderately changing, well-structured markets
Rapidly changing, ambiguous markets
Duration of advantage Sustained Sustained Unpredictable
Risk It will be too difficult to alter
Company will be too slow to build new resources as conditions change
Managers will be too tentative in executing on promising opportunities
Performance goal Profitability Long-term dominance Growth
Strategy as a Simple Rules
Traditional strategy advantage comes from - exploiting resources - stable market positions Strategy as simple rules advantage comes from successfully
seizing fleeting opportunities
Simple Rules Provide the guidlines within which
managers can pursue opportunities
Strategy consist of :- Unique set of strategically significant processes
- The handfull of simple rules that guide them
Strategy as a Simple Rules-Contd.
Simple Rules for Unpredictable Markets
Type Purpose Example
How-to rules They spell out key features of how
Akamai’s rules for the customer service process: staff must consist of technical gurus, every question must be answered on the first call or e-mail, and R&D staff must rotate through cutomer service
Boundary rules
They focus managers on whichbopportunities can be pursued and which are outside the pale
Intel’s rule for allocating manufacturing capacity:allocation is based on a product's gross margin
Priority rules They help managers rank the accepted opportunities
Cisco’s early acquisitions rule: companies to be acquired must have no more than 75 employees, 75% of whom are engineers
Timing rules
They synchronize managers with the pace of emerging opportunities and other parts of the company
Nortel’s rules for product development: project teams must know when a product has to be delivered to the leading customer to win, and product development time must be less than 18 months
Exit rules
They help managers decide when to pull out of yesterdays's opportunities
Oticon’s rule for pulling the plug on projects in development:if akey team member - menager or not - chooses to leave the project for another within the company, the project is killed
How Rules Are Created
Experience Mistakes eg.: Yahoo experience
Young Company Experience gained at other
companies
Strategies Stale Shifting the rulesShifting the rules
The problems are deep Switching Strategic Process
Knowing When to Change
Conclusion
Simple Rules : Select a few key strategic processes Craft a handful of simple rules Jump in
Strategic implication : companies must capture unanticipated,
fleeting opportunities in order to succeed